Harvard's documents for sales of $400 million of tax exempt securities revealed this week that its tax exempt status is under audit by the IRS. See McDonald and Lauerman, Harvard University Audited as Part of IRS Probe of Nonprofits, BusinessWeek.com (Jan. 11, 2010). Harvard is one of 40 educational institutions subject to the probe this year but indicated that it "has no reason to believe that the examination will have an adverse effect on the tax-exempt status of the university." Id. Harvard is the richest educational institution, even though its endowment lost about 10 billion dollars in the Great Recession. It also pays the managers of the endowment huge salaries--about $107 million for the six top managers in 2003.
Universities were selected following a survey of colleges and universities on their taxable operations and endowment funds and executive compensation practices. IRS compliance project.
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